For Immediate Release
Chicago, IL – December 26, 2024 – Today, Zacks Investment Ideas feature highlights General Motors GM and Ford F, Tesla TSLA.
Should Investors Still Buy Tesla Stock After Such an Impressive Rally?
Impressively outperforming the broader indexes, and many of its auto peers such as General Motors and Ford, Tesla shares have rallied +25% in December and are up over +75% year to date.
Investors may certainly be wondering if they should chase the surge in the EV leader's stock and if Tesla should have a spot in their portfolio as we edge closer to the new year.
Why Market Sentiment is High for TSLA
Leading to high investor sentiment for Tesla is that many analysts have remained bullish on the company's long-term initiatives. This includes the expansion of Full Self-Driving (FSD) or autonomous vehicle production in its EV fleet along with the planned launch of robotaxis.
Also sparking the continued surge in TSLA is the re-election of Donald Trump who has appointed Tesla CEO Elon Musk as a co-leader to head the new Department of Government Efficiency (DOGE).
While Musk will not be an official member of the President's cabinet, the Trump administrations deregulation stance in favor of EV manufacturers has led to much optimism in terms of benefiting Tesla's operations and expansion plans.
Tesla's Growth Trajectory
Based on Zacks estimates, Tesla's total sales are now expected to increase 3% in fiscal 2024 and are projected to expand another 17% in FY25 to $117.58 billion.
On the bottom line, annual earnings are expected to dip to $2.47 per share this year compared to EPS of $3.12 in 2023. However, FY25 EPS is projected to rebound and soar 32% to $3.26 per share.
Positive EPS Revisions
Further supporting the rally in Tesla stock is that FY24 and FY25 EPS estimates have risen 10% and 8% over the last 60 days, respectively.
Bottom Line
Based on the trend of positive earnings estimate revisions, Tesla stock currently sports a Zacks Rank #1 (Strong Buy). Furthermore, the implied governmental support Tesla will receive under the Trump administration does suggest TSLA should remain a viable investment going into 2025.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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